Freeport-McMoRan Copper & Gold (FCX) announced definitive merger agreements under which FCX will acquire Plains Exploration & Production Company (PXP) for approximately $6.9B in cash and stock and FCX will acquire McMoRan Exploration (MMR) for approximately $3.4B in cash, or $2.1B net of 36% of the MMR interests currently owned by FCX and PXP. Upon closing, MMR shareholders will also receive a distribution of units in a royalty trust which will hold a 5% overriding royalty interest on future production in MMR’s existing shallow water ultra-deep properties. The combined company is expected to be a premier U.S.-based natural resource company with an industry leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. FCX has agreed to acquire PXP for per-share consideration consisting of 0.6531 shares of FCX common stock and $25.00 in cash, equivalent to total consideration of $50.00 per PXP share, based on the closing price of FCX stock on December 4. This represents a premium of 39% to the PXP closing price on December 4, and 42% to its one-month average price at that date. PXP shareholders may elect to receive cash or stock consideration, subject to proration in the event of oversubscription, with the value of the cash and stock per-share consideration to be equalized at closing. Aggregate consideration to the PXP shareholders is expected to consist of approximately $3.4B in cash and approximately 91M shares of FCX common stock. FCX has agreed to acquire MMR for per-share consideration consisting of $14.75 in cash and 1.15 units of a royalty trust, which will hold a 5% overriding royalty interest in future production from MMR’s existing ultra-deep exploration properties. The cash consideration of $14.75 per share represents a premium of 74% to the MMR closing price on December 4, and 31% to its one-month average price at that date. The cash portion of the transaction totals $2.1B, excluding payment for MMR interests currently held by FCX and PXP. The cash premium, excluding interests held by FCX and PXP, totals approximately $900M. In pre-market trading after the deal was confirmed, after being reported by Financial Times and The Wall Street Journal, shares of Freeport are down about 14% to $32.90. Meanwhile, shares of Mcmoran Exploration are higher by over 74% to $14.75 and Plains Exploration is up 24% to $44.73.